Michigan Executive Order Freezes Eviction Actions During COVID-19 Emergency

 

On March 10, 2020, the State of Michigan identified the first two presumptive-positive cases of the novel coronavirus (COVID-19) in its borders.  That same day, Governor Gretchen Whitmer issued an executive order declaring a state of emergency based on her authority under Art. 5, Sec. 1 of the Michigan Constitution of 1963, the Emergency Management Act (MCL 30.401 through 30.421) and the Emergency Powers of the Governor Act (MCL 10.31 through 10.33).  “The governor shall, by executive order or proclamation, declare a state of emergency if he or she finds that an emergency has occurred or that the threat of an emergency exists.”  MCL 30.403(4).  “After making the proclamation or declaration, the governor may promulgate reasonable orders, rules, and regulations as he or she considers necessary to protect life and property or to bring the emergency situation within the affected area under control.”  MCL 10.31(1).  To further this objective, the governor issued Executive Order 2020-21 on March 24, 2020 (and later extended by Executive Order 2020-42 on April 8, 2020) which required Michigan residents “to remain at home or in their place of residence to the maximum extent feasible.”  However, this order comes during a time that non-essential businesses were forced to close and many thousands of employees across the state were laid off.  This has led to difficulties for many tenants to make rent payments and face the prospect of eviction.

To keep people in their homes during this emergency, Governor Whitmer issued Executive Order 2020-19 on March 23, 2020 ordering that all eviction actions are frozen until April 17, 2020.  On April 17, 2020, the governor issued Executive Order 2020-54 which extended the eviction freeze until May 15, 2020.  The details of this executive order are as follows:

• “Due to the protection that a residential home provides from the COVID-19 pandemic, and the need to contain self-quarantined and self-isolated individuals within a residential home, no person shall remove or exclude from leased residential premises or residential premises held under a forfeited executory contract a tenant, a vendee of a forfeited executory contract, or a person holding under a tenant or vendee, except when the tenant, vendee, or person holding under them poses a substantial risk to another person or an imminent and severe risk to property. This order should be broadly construed to effectuate that purpose. This section is effective immediately and continues until May 15, 2020 at 11:59 pm.” Executive Order 2020-54, Section 1.

• “Nothing in this order shall be construed to abrogate the obligation to pay or right to receive payment due under a lease, nor to prohibit a landlord from making a demand for the payment of rent. Any demand for the payment of rent, however, must not include a demand for possession, or other threat of eviction, based on the nonpayment of rent. Effective immediately and continuing until May 15, 2020 at 11:59 pm, any service of a demand for payment may not be made by personal delivery.” Executive Order 2020-54, Section 3.

• “Due to the protection that a residential home provides from the COVID-19 pandemic, and the need to contain self-quarantined and self-isolated individuals within a residential home, no person may enter residential property in order to remove or exclude from the premises a tenant, a vendee of a forfeited executory contract, a person holding under a tenant or vendee, or the personal property of a tenant, vendee, or person holding under them, including pursuant to a writ authorizing restoration of a plaintiff to full, peaceful possession of premises under section 5744 of the RJA, MCL 600.5744, except when the tenant, vendee, or person holding under them poses a substantial risk to another person or an imminent and severe risk to property. This section is effective immediately and continues until May 15, 2020 at 11:59 pm.” Executive Order 2020-54, Section 4.

• “Due to the protection that a residential home provides from the COVID-19 pandemic, and the need to contain self-quarantined and self-isolated individuals within a residential home, a sheriff, under-sheriff or constable, deputy, or other officer must not serve process requiring forfeiture of leased residential premises or residential premises held under a forfeited executory contract. Any requirements to that effect imposed by the RJA are suspended. This section is effective immediately and continues until May 15, 2020 at 11:59 pm.” Executive Order 2020-54, Section 5.

• “Due to the protection that a residential home provides from the COVID-19 pandemic, and the need to contain self-quarantined and self-isolated individuals within a residential home, no person may deny a mobile home owner access to their mobile home, except when the mobile home owner’s tenancy has been terminated because the mobile home owner poses a substantial risk to another person or an imminent and severe risk to property. This section is effective immediately and continues until May 15, 2020 at 11:59 pm.” Executive Order 2020-54, Section 6.

• “Until thirty (30) days after the restrictions on eviction provided by sections 1 through 6 expire, any statutory limits on the court of this state to adjourn any proceedings, toll any redemption periods or limitations periods, or extend any deadlines are suspended.” Executive Order 2020-54, Section 7.

Although the landlord is prevented from filing most evictions now, tenants should keep in mind all of the following:

• This freeze on eviction actions does NOT abate or prevent the accumulation of rent charges. When the landlord is able to file suit again, he or she can base a demand for possession on all of the unpaid rent that accumulated during the state of emergency.  The executive order only stalls and buys time for the tenant to get the funds together and make the situation right.

• This freeze on eviction is NOT absolute. A landlord can still pursue an eviction suit during the state of emergency if the tenant or mobile home owner “poses a substantial risk to another person or an imminent and severe risk to property”.  For example, a landlord can allege that the tenant was engaged in domestic violence, was operating a meth lab in the rented premises, or was engaged in an unlawful and destructive demolition.  However, a landlord cannot unilateral take action to remove the tenant and must still follow all lawful procedures to obtain a court order evicting the tenant from the premises.

In addition to Michigan’s executive orders, the Coronavirus Aid, Relief And Economic Security (CARES) Act passed by the federal government provides additional security for tenants and owners living in specifically designated real estate:

• Properties with Federally Backed Mortgage Loans (CARES §4022) – Borrowers with a first or subordinate lien on residential real property that is insured by FHA or National Housing Act, or guaranteed by the U.S. Department of Veteran Affairs or the U.S. Department of Agriculture, or is secured by the Federal Home Loan Mortgage Corporation (“Freddie Mac”) or the Federal National Mortgage Association (“Fannie Mae”) can request forbearance up to 180 days (with possible extension to 360 days) from the lender on any payments due without additional fees, penalties or interest due to financial hardship caused by COVID-19.

• Properties with Federally Backed Multifamily Mortgage Loans (CARES §4023) – Multifamily borrowers (e.g. housing with 5 or more dwelling units) with a lien on residential real property that is insured by FHA or National Housing Act, or guaranteed by the U.S. Department of Veteran Affairs or the U.S. Department of Agriculture, or is secured by the Federal Home Loan Mortgage Corporation (“Freddie Mac”) or the Federal National Mortgage Association (“Fannie Mae”) that was current on February 20, 2020 can request forbearance up to 30 days (with possible extension to 90 days) from the lender on any payments due without additional fees, penalties or interest due to financial hardship caused by COVID-19.

• Moratorium on Evictions From “Covered Dwellings” (CARES §4024) – Landlords are prohibited from filing new eviction actions for nonpayment of rent between March 27, 2020 and July 24, 2020 and charging any late fees or penalties during that period due to nonpayment of rent. After the moratorium is lifted, landlords must give the tenants 30 days of notice to vacate the premises before filing an eviction action.  This law applies to “covered dwellings” which are defined as:

• • • Residential single family or multifamily dwellings that have “federally backed mortgage loans”, meaning the lien is insured by FHA or National Housing Act, or guaranteed by the U.S. Department of Veteran Affairs or the U.S. Department of Agriculture, or is secured by the Federal Home Loan Mortgage Corporation (“Freddie Mac”) or the Federal National Mortgage Association (“Fannie Mae”).

• • • Residential single family or multifamily dwellings that are either participating in a covered housing program as defined by the Violence Against Women Act of 1994 (34 U.S.C. §12491(a)), a participating property in the rural housing program under Section 542 of the Housing Act of 1949 (42 U.S.C. §1490r), or participates in other federal housing programs that include Section 8 voucher housing participants, Low Income Housing Tax Credit (LIHTC) housing, or other HUD-funded public housing.

To be covered under the federal law, tenants must reside in housing explicitly stated in the CARES Act.  In addition, this relief does not apply to eviction actions filed before passage of the CARES Act on March 27, 2020.  Finally, the tenant is protected from eviction for nonpayment of rent during this moratorium period, but there is NO protection for other reasons such as a substantial breach of lease terms or public health hazards.  However, remember that Michigan’s Executive Order 2020-54 provides additional protection for state residents by freezing eviction for all reasons except that the tenant “poses a substantial risk to another person or an imminent and severe risk to property”.  In addition, landlords who believe they have grounds in Michigan to file for summary proceedings during the COVID-19 state of emergency must comply with Michigan Supreme Court Administrative Order No. 2020-8 and submit verification that the property is except from coverage under the CARES Act.

On March 23, 2020, the Michigan Supreme Court issued Administrative Order No. 2020-3 which extends the deadlines for initiating a civil action or responding to a civil action.  These civil actions include landlord-tenant matters.  If a deadline to file or respond occurs during the state of emergency declared by the governor on March 10, 2020, then the deadline is extended to the end of the business day immediately following the day that the state of emergency is lifted.  For example, if an eviction action was filed on March 8, 2020 (two days before the state of emergency) and the tenant had five-days to respond to the complaint for possession (normal deadline of March 13, 2020), then the tenant’s time to respond is extended to after the state of emergency is over.  If Governor Whitmer lifts the state of emergency on June 1, 2020, then the tenant will have until the end of day on June 2, 2020 to respond to the pleadings or else he or she will be in default.  Tenants should pay very close attention to these deadlines and consult a skilled attorney if unsure how to calculate the timeline.

Landlords who violate these laws and executive orders can be subject to civil and criminal penalties.  A landlord who wrongfully ejects a tenant without a court order can be liable for TRIPLE DAMAGES under Michigan’s landlord lockout law.  Violating these directives can also lead to the landlord’s arrest for a crime.  “A person who willfully disobeys or interferes with the implementation of a rule, order, or directive issued by the governor pursuant to [the Emergency Management Act] is guilty of a misdemeanor” punishable by up to 90 days in jail or a fine up to $500.00, or both.  MCL 30.405(3).  In addition, “[t]he violation of any such orders, rules and regulations made in conformity with [the Emergency Powers of Governor Act] shall be punishable as a misdemeanor, where such order, rule or regulation states that the violation thereof shall constitute a misdemeanor”, punishable by up to 90 days in jail or a fine up to $500.00, or both.  MCL 10.33.

If you are a landlord or tenant that has questions about their legal responsibilities under state and federal law during the COVID-19 crisis, then do not hesitate to contact the experienced attorneys at Kershaw, Vititoe & Jedinak PLC for immediate assistance today.